Role of the Federal Reserve in the Payments System

Abstract The topic of this review paper is to provide an analysis of the business office the Federal give System plays in the nations honorarium mechanisms. The scope of this paper is to provide a compend of the Federal controls evolvement over time in response to the new emerging payment needs of society. The subtopics that leave be addressed in this paper are as follows: a historical perspective of the Federal admits role in the payment system, the role of the Federal Reserve as facilitator in the payment mechanisms, the impact technology has had on the role of the Federal Reserve in the payment system, and time to come trends and developments that may affect the role of the Federal Reserve. A regeneration of sources have been used, selected based on their academic contribution and relevance to the subject. Historical Perspective The Federal Reserve System was founded in 1913 by Congress, as a much needed solution to the free waves of financial panics, bank failures, and business bankruptcies that had plagued the nation. Specifically, the role of the Federal Reserve in the payment system emerged out of the ashes of the 1907 crisis, when widespread payment disruptions occurred, due to some banks and clearinghouses refusal to clear checks drawn on other(a) banks. It became evident therefore that establishing a nationwide check-clearing system was proficient of life to providing not only an elastic currency, but also an high-octane and equitable check-collection system.

The foundation principles of the institution that would become the Federal Reserve System were established by the National Monetary Commission, whose wager culminated with the passage of the Federal Reserve Act and ultimately, the signing by President Woodrow Wilson in December 1913. Composed of the Board of Governors and twelve regional Federal Reserve Banks, the Federal Reserve was created to bear the responsibility of supervising and... If you want to get a full essay, order it on our website: Ordercustompaper.com

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